Compare College Savings Options

529 college savings plans offer distinct advantages no matter your circumstances, budget, or goal. You control the account and can change the beneficiary at any time, subject to IRS regulations. There are no income restrictions, and any earnings are tax-deferred. Distributions are exempt from federal income tax if used for qualified education expenses. 529 plans can vary from state to state, and there may be different costs, investment options, and tax incentives. When choosing the plan that’s right for you and your family, compare the features of your state’s 529 plan to others.

Where can I use my savings? Can be used at almost all colleges, universities, vocational schools, or apprenticeship programs in the U.S. (some international schools qualify as well), and up to $10,000 per year can be used for qualified K-12 tuition expenses.+ Can also be used for qualified education loan repayments of $10,000 lifetime maximum per beneficiary. Until the child reaches the age of majority, the custodian must use the money for the child. After that, the money belongs to the child. No restrictions
How are the withdrawals and earnings taxed?* No federal taxes for withdrawals used to pay qualified educational expenses. Until withdrawal, your account has tax-deferred growth potential. Above a given level, earnings will be taxed at either the child's or the parent's rate. Taxes apply. Earnings may be taxed as capital gains or ordinary income.
What are the contribution limits? Often $475,000 or more, depending on the plan No limit No limit
Who controls the money? The account holder The money belongs to the child, although it is controlled by a custodian until the child reaches the age of majority. The account owner
Does my income level affect my ability to contribute? No No No
Can I change beneficiaries? Yes. You can transfer assets to another member of the beneficiary's family. No Not applicable
Learn more 529 Plans Gifts and Transfers to a Child (UGMAs/UTMAs) Taxable Accounts

*This chart only addresses federal tax advantages because state tax treatment may vary. Earnings on a distribution expenses may be subject to income taxes and a 10% federal penalty.

+While distributions from 529 college savings plans for elementary or secondary education tuition expenses are federally tax-free, state tax treatment will vary and could include state income taxes assessed, the recapture of previously deducted amounts from state taxes, and/or state-level penalties. You should consult with a tax or legal advisor for additional information. 

Important Educational Savings Account (ESA) Information.

As of January 1, 2012, T. Rowe Price no longer accepts new assets to Education Savings Accounts (ESAs) or new ESAs.

In place of an ESA, you may want to consider opening a 529 plan account to help your child save for college. A 529 plan offers tax-advantaged savings for college and can be used to pay qualified education expenses at colleges and universities throughout the United States. In addition, 529 plans can now be used to save for tuition expenses at K-12 public, private, and religious schools up to $10,000 per beneficiary per year per account.